The U.S. dollar remained supported at five-week highs against other major currencies on Wednesday, as Tuesday’s hawkish remarks by Federal Reserve Chairman Jerome Powell continued to boost demand for the greenback.
The greenback was boosted after Fed Chair Jerome Powell reiterated on Tuesdaythat the U.S. central bank would likely move forward with gradual increases in interest rates.
“The economic outlook remains strong,” he said. “Further gradual increases in the federal funds rate will best promote attainment of both of our objectives.”
Powell was speaking at his first semi-annual monetary policy testimony to the House Financial Services Committee since taking over the helm of Fed earlier this month.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.12% at 90.41 by 05:15 a.m. ET (09:15 GMT), the highest since january 22.
The euro and the pound were lower, with EUR/USD down 0.16% at 1.2212 and with GBP/USD slipping 0.18% to 1.3882.
Preliminary data on Wednesday showed that euro zone consumer prices rose in line with expectations this month.
Elsewhere, the yen was stronger, with USD/JPY shedding 0.22% to 107.09, while USD/CHF gained 0.34% to trade at 0.9420.
The yen strengthened after the Bank of Japan trimmed bond purchases, reviving speculation that it is moving closer to an exit from its massive stimulus program.
The Australian dollar was higher, with AUD/USD up 0.26% at 0.7810, while NZD/USDfell 0.28% to 0.7214.
Meanwhile, USD/CAD held steady at 1.2767.